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Seeking Alpha - I’m lucky to count among my friends Charlie Michaels, owner of hedge fund company Sierra Global and portfolio manager of the Sierra Europe Fund. Charlie is among the few hedge fund managers sitting on a gain so far this year.
According to the HFRI Fund Weighted Composite Index managed by Hedge Fund Research, Inc. in Chicago, the average hedge fund dropped 5.4% last month and is down 15.5% so far this year. The industry has been losing for five months in a row, which is the longest down streak since the index began in 1990.
Charlie and his team at Sierra Global, meanwhile, gained 0.2% in September, 3.0% last month, and are up 8.6% so far this year. The only year the Sierra Europe Fund ended down was 2002, when it lost 12.3%. The FTSE 100 lost 25% that year and the DAX 42%, so even Sierra’s loss that year can be chalked up as a relative victory. All of which is to say that it’s worth paying attention to Charlie when it comes to stocks.
Reuters - A Citadel Investment Group LLC executive who ran an unprofitable credit investment group for the large hedge fund company has resigned, a person familiar with the matter said on Friday.
Joe Russell, who was instrumental in making Citadel’s investments in E*Trade Financial this year and in failed hedge fund Sowood Capital last year, left the Chicago-based firm this week, said the source, who requested anonymity in order to speak freely about the matter.
Russell ran the smallest of Citadel’s three credit groups, and it was the only one that was not profitable.
He resigned amid disagreements over how to manage the group, which like all of Citadel’s credit groups invested in highly leveraged companies, the source said. The group that Russell ran will now be folded into the two other credit groups that concentrate on convertible and structured debt.
Stamford Advocate - A Greenwich hedge fund company is among hundreds of the risky investment entities that have closed or are projected to close this year amid volatile equity and commodity markets.
Turnberry Capital Management told investors last week that it will liquidate its fund and close its doors after most of the clients sought to withdraw their money, Reuters reported. The fund, which invests in distressed debt, once managed about $800 million.
"We intend to take a series of steps to liquidate the Fund and redeem all Fund investors at the same pace," fund manager Jeff Dobbs wrote in a letter to clients that Reuters obtained. "After Labor Day, we will commence a sell-down of the Fund’s security holdings in order to raise cash to fund redemptions."
Reuters - Man Group Plc, the world’s biggest listed hedge fund company, said demand for its fund products had remained strong in the first quarter and it was confident about its prospects for the full year.
Sales in the three months to June 30 were $5.0 billion (2.5 billion pounds) while funds under management increased to $79.5 billion from the $74.6 billion seen at the end of March.
"Demand for our fund products has remained strong, both from private investors and institutions," Chairman Jon Aisbitt said in a statement prepared for the annual shareholder meeting on Thursday.
"This success in asset raising reflects the group’s broad geographic presence and the continued attraction of conservatively structured alternative investment products," he added.
Reuters- Man Group, the world’s biggest listed hedge fund company, posted a 60 percent rise in annual profit on Thursday, riding turbulent financial markets to show strong growth in funds under management which fuelled record management fees.
Chief Executive Peter Clarke told Reuters a key part of the firm’s strong results was the performance of its AHL futures business, which, with no exposure to equities, proved particularly successful during the intense volatility in stock markets over the past nine months.
"Diversification and low correlation is a key to surviving these markets," Clarke said.
West Palm Beach (HedgeCo.net)- Kirk Wright’s Atlanta-based hedge fund company, International Management Associates, was found to be fraudlent leading to the conviction of the manager, Wright, as the Department of Justice unsealed a March 10 criminal complaint against him.
"The complaint alleges a fraud involving $150 million to $180 million in missing investor assets managed by Wright’s funds, International Management Associates and International Management Associates Advisory Group," said U.S. Attorney David Nahmias in a statement.
The federal complaint charges mail fraud, executed by mailing a set of false asset statements to IMA investor Stephen Atwater. The charge carries a maximum sentence of 20 years in prison and a fine of up to $250,000 on conviction.
According to authorities, Wright and his company collected more than $150 million spread across thousands of client accounts since 1997 and used false statements and documents to mislead some of them to believe the value of those investments was increasing.
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